Big Tech Payment Platforms Comments of USPIRG and the Center for Digital Democracy CFPB Docket No.-2021-0017 December 21, 2021
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Big Tech Payment Platforms
Comments of USPIRG and the Center for Digital Democracy
CFPB Docket No.-2021-0017
December 21, 2021
The US Public Interest Research Group (USPIRG)1 and the Center for Digital Democracy
(CDD)2 respectfully submit these comments in connection with the Bureau’s October 21, 2021
request to six leading technology companies, as well as its call for comments. The Bureau has
chosen the six Big Tech companies for Section 1022 information requests wisely, as they are key
leaders shaping the “embedded finance” system promoted by the platforms and key digital
payment service providers.
We also commend the Bureau for its announcement last week of a related Section 1022 inquiry
into five “Buy Now, Pay Later” (BNPL) firms, including Afterpay, which is in the process of
being acquired by Square (apparently now renamed Block3), one of the subjects of this market-
monitoring inquiry into Big Tech and payments.4 Big Tech’s entry into the payments space must
be seen as just one of its attempts to take over the broader finance system, which poses
existential threats to the financial system, including to the longtime separation of banking and
commerce.
USPIRG and CDD believe the U.S. is at an especially critical inflection point regarding digital
platforms, digital payment services and online consumer protection: the pervasive tracking of
data on individuals, families and groups, online and off; the nearly real-time ability to target a
consumer with financial and other product offers regardless of where they are or device they use;
and the development of a highly sophisticated and now machine-driven apparatus to deliver
personalized marketing and communications, have all led to a largely unaccountable digital
marketplace. A handful of digital platform giants and their partners stealthily operate what is
known as a “surveillance marketing” system, which now pervades every aspect of our lives—
increasingly affecting how the public engages with the financial services sector.
1
U.S. PIRG (https://uspirg.org) is an advocate for the public interest. We speak out for a healthier, safer
world in which we’re freer to pursue our own individual well-being and the common good. As an
organizational priority, U.S. PIRG seeks to protect consumers in the financial marketplace and digital
world.
2
The mission of the Center for Digital Democracy (https://www.democraticmedia.org) is to ensure that
digital technologies serve and strengthen democratic values, institutions and processes. CDD strives to
safeguard privacy and civil and human rights, as well as to advance equity, fairness, and community.
3
Although note that Square has been sued by H.R. Block over its renaming, see Clint Rainey, “Jack
Dorsey’s Block Sued by H&R Block in a Challenge to Big Tech’s Seizure of Everyday Words,” Fast
Company, 16 Dec. 2021, https://www.fastcompany.com/90706886/hr-block-sues-jack-dorsey-square-
rebrand.
4
CFPB News Release, “Consumer Financial Protection Bureau Opens Inquiry into ‘Buy Now, Pay Later’
Credit,” 16 Dec. 2021, https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-
protection-bureau-opens-inquiry-into-buy-now-pay-later-credit/.
1As the Bureau’s Request for Comment illustrates, it is aware of the serious ramifications to
consumers and small businesses as the U.S. accelerates its transition to what Google calls
“embedded finance.” The leading platforms and online services, as they accelerate their roles as
America’s new bankers and lenders, bring with them a host of critical issues that the Bureau
must address. Moreover, the industry’s “closed-loop” business model, where platforms and
online data and ad practices are able to operate in a non-transparent manner, which has already
caused an uproar from global marketers, is poised to have even greater consequences as it
assumes greater control over our daily financial experiences.5
The Bureau has also indicated an interest “in studying the payment system practices of Chinese
tech giants, including Alipay and WeChat Pay.”6 This Examination should trigger rules for
foreign digital payment services doing business in the U.S., and also help identify looming
consumer threats and challenges. China’s experience with digital payment services is
fundamental for better understanding and responding to the dramatic transformation of the
financial system due to digital technology and major platforms and holding companies.7 Alipay
is used by Chinese citizens when they make purchases when traveling in the U.S., including its
use at such chains as “CVS, Walgreens, Sephora, Target, Hilton, Hyatt, Marriott International”
as well as :online stores through Shopify's platform….”8 Alipay’s use of AI and other new
technologies, as well as its data-analytic process, illustrates contemporary Big Data applications
that have reshaped the consumer and commercial landscape.9 We urge the Bureau to specifically
5
See, for example, ID Comms, “ID Comms 7Ts® Global Transparency Report,” Dec. 2021,
https://s3.amazonaws.com/media.mediapost.com/uploads/ID_Comms_7Ts_MediaTransparency_2021_re
port.pdf; Barry Levine, “ANA Calls for Independent Audits of Ads in the ‘Walled Gardens,’” MarTech,
17 Mar. 2017, https://martech.org/ana-calls-independent-audits-ads-walled-gardens/.
6
We note that a Trump administration report asserted that “While access to payment clearing and
settlement services is generally limited to depositary institutions in the United States, some countries have
provided mechanisms that allow nonbanks to access those services.… In China, authorities have allowed
nonbank fintechs to access payment systems to clear and settle retail payment transactions. Large
nonbank firms, like Ant Financial (AliPay) and Tencent (WeChat) have established dominant positions in
the Chinese mobile payments market, with 54.3% and 38.2% shares of the market, respectively, in 2017.”
U.S. Department of the Treasury, “A Financial System That Creates Economic Opportunities: Nonbank
Financials, Fintech, and Innovation: A Report To President Trump,” U.S. Treasury Dept., July 2018, p.
180, https://home.treasury.gov/sites/default/files/2018-08/A-Financial-System-that-Creates-Economic-
Opportunities---Nonbank-Financials-Fintech-and-Innovation_0.pdf.
7
Jaime Toplin, “China Mobile Payments Forecast 2021: Government Crackdowns and Innovation Could
Disrupt a Mature, Duopolized Market,” eMarketer, 29 Oct. 2021, https://content-
na1.emarketer.com/china-mobile-payments-forecast-2021.
8
Kate Silver, “How Alipay Connects US Businesses with Chinese Consumers,” Protocol,
https://www.protocol.com/sponsored-content/the-new-wave-of-global-trade-how-alipay-connects-us-
businesses-with-chinese-consumers?rebelltitem=2#rebelltitem2.
9
Ant Group, “Technological Innovation,” https://www.antgroup.com/en/technology; Alipay, “Alipay for
Business: North America, Connecting North American Businesses with Asian Markets,” 22 Apr. 2021,
https://www.youtube.com/watch?v=ij5bU4qw5Ds&t=33s.
2review how these leading Chinese-based payment services are used to foster digital marketing of
financial products.10
We see numerous platform and other online practices posing threats to fairness, privacy,
equity, justice, and consumer rights in the financial services marketplace. The online
environment is now our public square, workplace, recreational destination and where we reside.
The amount of time Americans spend online illustrates how this system is so intertwined in our
lives—eight hours a day. This includes time spent on mobile, social media, video streaming,
digital audio and desktop computing.11 According to one report, “ninety-five percent of U.S.
adults [now] own a device with which they could make a transaction,” facilitated via a “slew of
high-profile partnerships [enabling] payments on these devices.”12 In fact, the majority of
Americans—some 77 percent—use digital payment applications, including in-app transactions,
peer-to-peer money transfers, and in-store mobile payments.13 Mobile devices now serve as
contactless terminals for payment processing as well.14 The digital system will only grow in
power and influence, becoming the essential link for consumers and businesses to engage with
all manner of financial services. We believe the Bureau should especially analyze how the
confluence of platforms and digital payment services could further exacerbate the fragile
financial state of Americans now struggling—or who faced historic discriminatory treatment—in
our economy.
The coronavirus pandemic has accelerated the broader adoption and evolution of digital payment
services in the U.S., as well as spurred other consumer behaviors connected to online financial
transactions. As McKinsey notes in its 2020 report on digital payments, the pandemic “crisis is
compressing a half-decade’s worth of change into less than one year—and in areas that are
typically slow to evolve: customer behavior, economic models and payments operating
10
See, for example, Eggsist, “Alipay Drive to Commerce & Drive to Store Super APP,”
https://www.eggsist.com/en/what/alipay-marketing-solutions-strategy/?cn-reloaded=1; “Advertising on
WeChat: Cost, Ad Formats, Targeting, Rules & Regulations,” WeChat Wiki,
https://wechatwiki.com/wechat-resources/wechat-advertising-media-buying-guide/.
11
Audrey Schomer, “US Time Spent with Media 2021: Digital Media Usage Gains After the 2020
Pandemic Year, but Traditional Formats Fade,” eMarketer, 27 May 2021, https://content-
na1.emarketer.com/us-time-spent-with-media-2021.
12
Jaime Toplin, “The Payments Ecosystem,” eMarketer, 15 Jan. 2021, https://content-
na1.emarketer.com/payments-ecosystem.
13
Stephen Whiteside, “Understanding the Four User Groups for Digital Payments,” WARC Event
Reports, Money 20/20, Oct. 2019, https://www.warc.com/content/article/event-reports/understanding-the-
four-user-groups-for-digital-payments/130627. There is also “grab and go” commerce, such as via
Amazon Go. See, for example, Amazon Go. https://www.amazon.com/b?ie=UTF8&node=16008589011.
14
Mark Gurman, “Apple Buys Startup to Turn iPhones Into Payment Terminals,” Bloomberg, 31 July
2020, https://finance.yahoo.com/news/apple-buys-startup-turn-iphones-002443381.html; Mastercard,
“Tap on Phone,” https://www.mastercard.com/global/en/business/overview/start-accepting/tap-on-
phone.html.
3models.”15 The pandemic has helped make the further evolution to online buying and ecommerce
activities, including for consumer products, a routine part of our daily experience. The shift to
online transactions fostered by the response to the pandemic is also contributing to a key
transition phase in the financial services sector.16 Consumers are more open to changing the
relationships they may have with legacy institutions and adopt alternative or emerging
approaches.17
The growing role of platforms to leverage their market positions to shape the digital payment
system is now disintermediating “banks and credit card companies from consumers.” These
platforms are poised to dominate consumer and small business financial markets as much as they
now do ecommerce, entertainment, and communications.18 In the process, these platforms and
their online financial and other service partners will pose a series of threats. Their operating
model, as we discuss below, engages in far-reaching forms of consumer manipulation, relying on
a host of online marketing tactics designed to trigger a range of responses.19 There is a very real
risk that without Bureau action, the digital payments and platform complex will aggressively
push Americans to new levels of debt, as the Big Data and artificial intelligence (AI) apparatus
now at the core of the consumer digital economy encourages impulse buying and other
potentially consequential practices. These entities have so much information on individuals,
communities and commerce, they easily dislodge smaller and locally-based businesses. Since
data analyzed by the platforms is used to identify commercial opportunities across the range of
their product offerings—which is basically making everything available for sale—a consumer
will not be aware, let alone control, how this information can be used to target them with other
products and services. As Alphabet/Google highlighted in a recent report on “embedded
finance,” “online finance” has altered what people think is banking and managing finances:
“now, most financial transactions happen via mobile apps, websites, email, text messages and
other digital communications.” Google’s “white paper” suggests that embedded finance may be
“the new gold rush” for financial services. Among the competitive benefits claimed by Google
are that embedded finance “enables business to reach new customers at the moment when they
15
McKinsey & Company, “The 2021 McKinsey Global Payments Report,”
https://www.mckinsey.com/industries/financial-services/our-insights/the-2021-mckinsey-global-
payments-report.
16
Note that the pandemic has intensified this shift, but it has been occurring for years. See pp. 18-19
(“The Concept of the Transaction Itself Is Changing”), below.
17
“What We Know About Digital Payments,” WARC Best Practice, Dec. 2020,
https://www.warc.com/content/article/bestprac/what-we-know-about-digital-payments/129734
18
“Future of Payments: Admap Summary Deck.” Admap Magazine, Aug. 2019,
https://www.warc.com/content/article/future-of-payments-admap-summary-deck/127622.
19
See, for example, the use of so-called “neuromarketing” by Meta/Facebook and others to identify
subconscious and emotional responses to online media. Facebook, “How Ad Delivery on Multiple
Channels Affects Brain and Behavior,” Meta for Business, 10 Dec. 2015,
https://www.facebook.com/business/news/facebook-iq-multi-channel-ad-study; Nielsen, “Demand Fuels
Nielsen Consumer Neuroscience Expansion,” 20 Apr. 2018, https://www.nielsen.com/us/en/news-
center/2018/demand-fuels-nielsen-consumer-neuroscience-expansion/.
4need your services.” There is also an added “bonus”: “the data you collect from each
transaction….”20
According to a recent report from McKinsey, the success Google and other tech giants have had
dominating the marketplace should serve also as a model for banks. These institutions should
“future proof their business models…by making products that are embedded in their users’ daily
lives,” such as “drawing customers into their broader ecosystems and creating personalized
insights.”21
Online data brokers and financial data profiling of consumers. The largest data brokers have
significantly expanded into the digital marketing arena, especially through multiple acquisitions
of competitors or data-focused services companies. Experian, TransUnion, Acxiom, Equifax and
Epsilon, for example, each offer a host of surveillance-marketing-related tools that can be used to
target consumers for loans, credit and other products. This system largely operates in a stealth
manner, and we urge the Bureau to investigate how the major data brokers play a role in the
digital payment system, including by the platforms.22 For example, Acxiom explains that its
“consumer recognition, data management, omnichannel marketing and analytic services” enable
customers to “lend in real-time.”23 TransUnion has aggressively expanded its marketing footprint
to now include the millions of Americans who view streaming video, enabling various forms of
financial profiling, targeting and transactions.24 Epsilon’s financial services online marketing
division notes its capabilities to find and retain customers, as well as to support the “cross-sell”
of related products by using data that “anticipates the needs of each customer in real-time….”25
These data brokers have relationships with the key platforms, including through their various
cloud and data-processing operations.26
20
Google, “Embedded Finance: The Key to Survival and Growth for Financial Institutions,” Google
Cloud, https://cloud.google.com/resources/financial-services-embedded-finance-whitepaper
21
Paul Rohan and Thurain Tun, “Why Embedding Financial Services into Digital Experiences Can
Generate New Revenue,” Google Cloud, 14 May 2021, https://cloud.google.com/blog/topics/financial-
services/embedded-finance-and-apis-can-help-modernize-banks; Tom Auchterlonie, “Banks That Want to
Avoid Becoming Laggards Have a Brief Post-recovery Window to Exploit, McKinsey Says,” Business
Insider, 7 Dec. 2021, https://www.businessinsider.com/mckinsey-warns-that-banks-have-a-short-post-
recovery-window-2021-12.
22
See, for example, Experian, “Powering Innovative Fintech Lending Solutions with Accurate and
Reliable Data,” https://www.experian.com/fintech/marketplace-lending; Experian, “Connecting
Consumers and Marketplace Lenders,” https://www.experian.com/fintech/online-consumer-lending.
23
Acxiom, “Financial Services Marketing,” https://www.acxiom.com/financial-services-marketing/.
24
TransUnion, “TruAudience Data Marketplace,” https://www.truaudience.com/data-
marketplace#Features.
25
Epsilon, “Financial Services: Anticipate People’s Next Financial Need,”
https://www.epsilon.com/us/industries/financial-services.
26
See, for example, Epsilon, “Connect to Google’s Cloud via Partner Interconnect,”
https://epsilontel.com/partner-ecosystem/google-cloud/; Amazon, “Acxiom,” AWS Marketplace,
https://aws.amazon.com/marketplace/seller-profile?id=dbf3ff8e-416c-41a0-9f44-1fbeb8c160a4.
5Platforms’ and digital finance’s role in the financial crisis 2007-2008 should also serve as
warning: Through the use of online “lead-generation” tactics operating without constraint,
consumers were lured into high-interest mortgages and other loans.27 Data on individuals flowed
in and out of platforms and online services without any limit, oversight, or regulatory safeguard.
A great deal of this online lead-generation practice still thrives, on platforms and other leading
digital services. The Bureau should investigate as part of this proceeding the ways online “lead-
gen” is used to develop the targeting and sales of financial products to consumers.28
Critical Areas of Concern
As the Bureau knows, in order to effectively protect the public, including consumers and small
businesses, it must “unpack” the structural components of today’s commercial digital system in
the U.S. Decades of the failure to regulate and effectively oversee the online industry, especially
the most powerful entities, have unleashed a concentrated, unfettered data-driven, and
behaviorally impactful marketplace. Dominated by a few leading entities, the online data and
digital marketing industry operates as an exclusive club for insiders, who among themselves
make nearly all the decisions on how the internet and other online applications interact with
Americans and the rest of the world.29
We urge the Bureau to assess in this inquiry the following issues: the growing proliferation and
integration of payment services within multiple platform and digital device and application
functions, involving marketing, advertising, and e-commerce; the capture and unfettered use of
multiple sources of financial and other key data used for profiling individuals and groups of
consumers (including information reflecting a person’s race, ethnicity and income status); the
Big Data technologies and techniques deployed for online financial services-connected
applications (such as consumer data management platforms and AI-based software); and the
operating partnerships among leading platforms—including Amazon, Google and Facebook—
with multiple major banks, other financial services providers, and data servicing and marketing
companies.
27
Ed Mierzwinski and Jeff Chester, “Selling Consumers Not Lists: The New World of Digital Decision-
Making and the Role of the Fair Credit Reporting Act,” Suffolk University Law Review 46, no. 3 (2013):
845-880, https://cpb-us-e1.wpmucdn.com/sites.suffolk.edu/dist/3/1172/files/2014/01/Mierzwinksi-
Chester_Lead.pdf.
28
See, for example, Facebook, “Lead Ads: Generate New Leads by Providing Value for People,” Meta
for Business, https://www.facebook.com/business/ads/lead-ads; Google, “How to Generate High-quality
Leads with Digital Ads,” Think with Google, July 2021, https://www.thinkwithgoogle.com/consumer-
insights/consumer-journey/advertising-lead-generation-guide/?utm_medium=cpc&utm_source=paid-
media&utm_team=twg-us&utm_campaign=twg-cpc-us-2021q3-ASC-lead-generation-
guide&gclid=Cj0KCQiA8ICOBhDmARIsAEGI6o1xp2DaJc4SKgMdtjmAJr4z8MIXd2TxEmeoA6fIxCC
CUHsQR_PnGqcaAhl1EALw_wcB&gclsrc=aw.ds.
29
See, for example, the role of private trade associations in developing standards and applications: IAB,
“IAB Tech Lab Council,” https://iabtechlab.com/working-groups/. See also how platform-based divisions
determine how the larger public is treated online: “Shape the Future of Marketing with the Marketing
Science Team,” Facebook Careers, https://www.facebookcareers.com/life/come-build-with-the-facebook-
marketing-science-team/.
6Another critical concern is the growing consolidation and acquisition spree by digital payment
and platform companies, which is steadily enabling fewer, and more powerful, entities to play a
dominant role in this critical financial system. This consolidation of control in the digital
payments sphere is built upon the largely unfettered mergers and acquisitions that have
dominated the U.S. digital media industry for years. These developments require an urgent
response by the Bureau, given that a handful of platform and consumer device and application
companies dominate much of the mobile operating system and app store environments (and
thereby play a leading role in data-driven advertising and e-commerce). It should not come as a
surprise that, as the World Advertising Research Center noted in 2020, digital payment
applications are increasingly developed as “super apps, which bundle logistics, commerce,
payments and social [media with] mobile payment platforms.”30 The integration and bundling of
services in order to dominate multiple markets is exactly what the leading platforms do, with
financial payments and related applications at the core of their data-driven surveillance
apparatus. Adults in the U.S. spend 4 hours and 30 minutes daily on “nonvoice activities” with
their phones and tablets—primarily via apps. Platform and digital payment companies are using
this powerful channel to further expand their financial services offerings, taking advantage of
being positioned to be the always-on bank, credit card and retailer wherever we are and whatever
we do.31
Increasingly, U.S. (and global) consumers interact with a growing infrastructure of real-time
payment applications, ranging from well-known digital marketing industry players to dozens of
new entrants.32 The companies selected for the bureau’s inquiry are further expanding their
foothold in the payments space—but are already at scale to disrupt it. One outcome is that the
Big Tech firms’ entry could force changes to legacy payment network practices; another could
be that the Big Tech firms simply replace legacy bank and payments firms. The Big Tech firms
have a corporate surveillance business model that has widely different goals than those of
publicly chartered and regulated financial institutions; their model is antithetical to fair consumer
treatment generally, but which is especially true when financial matters are at stake.33 These
dominant online enterprises and their partners continually expand their capabilities to gather and
30
“What We Know About Digital Payments.”
31
Yoram Wurmser, “Insider Intelligence’s Mobile Trends to Watch in 2022: Apps Look Beyond Ads and
Embrace Embedded Commerce, QR Codes, and Sustainability,” eMarketer, 2 Dec. 2021, https://content-
na1.emarketer.com/insider-intelligence-mobile-trends-watch-2022.
32
See, for example, Stephen Nellis, “Adobe Taps Startup Bolt to Add One-click Checkouts to Commerce
Sites,” Reuters, 18 Nov. 2021, https://www.reuters.com/technology/adobe-taps-startup-bolt-add-one-
click-checkouts-commerce-sites-2021-11-18/; Daniel Keyes, “The Rise of Real-Time Payments,”
eMarketer, 14 Apr. 2021, https://www.emarketer.com/content/rise-of-real-time-payments.
33
Strategic Organizing Center, “SOC Complaint to the FTC Against Amazon, Inc. for Unlawful
Deception Under Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45 (a),” 8 Dec. 2021,
https://thesoc.org/what-we-do/soc-complaint-to-the-ftc-against-amazon-inc-for-unlawful-deception-
under-section-5-of-the-federal-trade-commission-act-15-u-s-c-45-a/; Foo Yun Chee, “EXCLUSIVE:
Amazon Seeking to Settle EU Antitrust Investigations, Sources Say,” Reuters, 9 Nov. 2021,
https://www.reuters.com/business/retail-consumer/exclusive-amazon-seeking-settle-eu-antitrust-
investigations-sources-say-2021-11-09/.
7leverage information collected and analyzed about consumers. The firms have also unleashed a
myriad of methods developed to trigger forms of a key online industry metric called
“engagement,” which is operationalized in multiple ways but ultimately designed to influence a
person’s behaviors and attitudes, including at an emotional and subconscious level.34 The
primary operational mission is to direct a consumer to a process called the “path to purchase,”
which integrates a host of applications, such as content, communications, social relationships,
data analytics and more to drive a purchase or other goal.35 Most, if not all, of these online-
platform-related practices are largely opaque in their operations, reflecting the rampant reliance
on what are known as “dark patterns” to keep consumers and customers in the “dark” about
terms, conditions and intent of the service.36
Additionally, there are robust mechanisms in place to measure how consumers react to the online
marketing and informational services they receive (increasingly in real time), which are
leveraged to engage in more precise advertising and targeting. For example, a company such as
PayPal is able to draw “on insights from its 325 million global users” to understand granularly
consumer attitudes and adjust its marketing accordingly.37
Need for foundational policies to ensure fair practices
The widespread adoption of mobile devices and apps by U.S. consumers has largely operated in
a regulatory- and consumer-protection-free environment, including a stunning lack of privacy
and data protection rights, or meaningful safeguards to ensure fair marketing practices. Most
consumer data-gathering and -use practices, as well as platform operations (including
programmatic or behavioral advertising operations) are conducted without any serious federal
oversight. The financial services industry was the second-leading spender for digital advertising
in 2020 (following the retail sector, which we will explain is also increasingly integrated into the
platform and payments apparatus). An estimated $19.62 billion was spent last year, which
includes nearly $14 billion for financial marketing via mobile channels. According to eMarketer,
financial service digital ad spend made up 14.6 percent of the entire U.S. digital ad market.38
34
IAB Mobile Measurement Task Force, “Mobile Engagement: Framework and Definitions,” Feb. 2014,
https://airmedia.com.mx/en/download/iab/4_iab_Engagement-Digital-Simplified-Final.pdf.
35
Co-author U.S. PIRG is also part of a growing network of organizations seeking to reduce wasteful
spending in other ways, including to guarantee a right to repair purchased goods and to “buy less, give
more” this holiday season. See, for example, U.S. PIRG, “Buy Less, Give More: Guide to a Different
Type of Gift This Holiday,” https://uspirg.org/feature/usp/buy-less-give-more and U.S. PIRG, “Right to
Repair,” https://uspirg.org/feature/usp/right-repair.
36
“Dark patterns” are discussed below in connection with Amazon Prime, pp. 19-20.
37
Karen Stocks, “If You’re Using a Single Tool for Measurement, Think Again,” Think with Google,
Feb./ 2020, https://www.thinkwithgoogle.com/marketing-strategies/data-and-measurement/media-
measurement-tools/; PayPal, “Marketing Solutions Overview,” PayPal Developer,
https://developer.paypal.com/docs/marketing-solutions/; “Shape the Future of Marketing with the
Marketing Science Team,” Facebook Careers, https://www.facebookcareers.com/life/come-build-with-
the-facebook-marketing-science-team/.
38
Blake Droesch, “US Financial Services Digital Ad Spending 2020,” eMarketer, 19 Aug. 2020,
https://content-na1.emarketer.com/us-financial-services-digital-ad-spending-2020; PWC and IAB,
“Internet Advertising Revenue Report: Full-year 2020 Results,” Apr. 2021,
8Projections indicate that we are in the midst of a significant investment by marketers to expand
their ecommerce and other online buying capabilities. By the end of 2023, notes one report,
“advertisers investment in both e-commerce and social media will have almost trebled when
compared to 2019, prior to” the emergence of Covid-19. These investments are designed to
expand the role that social commerce and other major new forms of engaging in transactions will
play in our lives. The leading platforms which will especially benefit from this increased ad
spend include Google, Meta, Amazon and TikTok (Douyin).39
Platforms are reworking their structures to further foster a seamless merchandising and payment
apparatus, through such key practices as “social commerce,” conversational or voice commerce
via peer-to-peer messaging apps and digital assistants such as Alexa and Google Home;
“Discovery Commerce,” “Livestream Commerce,” and “Q Commerce” (on-demand delivery).
Working with brands and other advertisers, platforms have added “touchpoints such as web
chats, video chats, virtual reality shopping events, and video experiences” to promote an
“omnipresent…convergent commerce” environment. For example, “social commerce via
platforms such as WeChat, TikTok, Facebook and Instagram take multiple forms, creating
impulse and unplanned ‘one-click’ purchases via ‘buy now’ buttons, creating new product
discovery via the power of peers.”40 Facebook, Instagram, Pinterest, Snapchat and TikTok offer
shoppable content, shoppable ads, in-app checkout, and partnerships with Shopify, as well as
various platform-based “shops.” Walmart and TikTok, for example, now have a partnership.41
The ongoing redesign of platform operations to trigger sales is, according to some experts,
collapsing the “shopper journey” to the point that it can become simply a “one-click see-and-buy
decision.”42
Increasingly, digital payment services are integrated into system functioning that incorporates
artificial intelligence and so-called “emotional intelligence” to more precisely facilitate consumer
https://s3.amazonaws.com/media.mediapost.com/uploads/InternetAdvertisingRevenueReportApril2021.p
df.
39
James McDonald and Rob Clapp, “Global Ad Trends: 2022 – Where is the Money Going?” WARC
Data, Dec. 2021, https://www.warc.com/content/article/warc-data/global-ad-trends-2022--where-is-the-
money-going/en-gb/142088.
40
Alison Chaltas, Norrelle Goldring and Jane Lattimore, “Beyond Omnichannel Retail to Convergent
Commerce,” WARC Exclusive, Dec. 2021, https://www.warc.com/content/article/warc-
exclusive/beyond-omnichannel-retail-to-convergent-commerce/142300.
41
William White, “Walmart Doubles Down on TikTok Shopping, Hosts All-New Live Stream Shopping
Event,” Walmart, 9 Mar.2021, https://corporate.walmart.com/newsroom/2021/03/09/walmart-doubles-
down-on-tiktok-shopping-hosts-all-new-live-stream-shopping-event; Andrew Lipsman, “Social
Commerce 2021: Media and Commerce Convergence Creates Growth Opportunity for Brands,”
eMarketer, 3 Feb. 2021, https://content-na1.emarketer.com/social-commerce-2021; “The WARC Guide to
Shoppable Media,” WARC Best Practice, Mar. 2021, https://www.warc.com/content/article/bestprac/the-
warc-guide-to-shoppable-media/135742.
42
Alison Chaltas and Norrelle Goldring, “Beyond Omnichannel Retail to Convergent Commerce,”
WARC Exclusive, Nov. 2021, https://www.warc.com/content/article/warc-exclusive/beyond-
omnichannel-retail-to-convergent-commerce/en-gb/140308.
9transactions.43 The Bureau should analyze how Google, its YouTube subsidiary, Meta’s
Instagram and other holdings have developed their e-commerce functionality and digital
payment operations, including the integration of multimedia “shoppable layers” and the role of
“emotional intelligence” and machine-learning operations.44 There is a significant expansion of
AI and machine-learning tools deployed to drive more precise consumer behaviors. According to
Google, “50% of exchanges, trading systems, and data providers are offering data products or
services powered by AI/ML, and of those, 42% intend to offer AI-powered trade execution and
trading analytics services in the next 12 months. Within commercial and investment banks, 55%
said they are currently using AI/ML in the cloud, and while that was true for only 14% of overall
buy-side respondents, 44% of large buy-side respondents are using it.”45
We also urge the Bureau to include in its analysis how platforms and online payment services are
embedded in the “Internet of Things,” especially “wearables,” “connected” automobiles, and
“smart” TVs.46 It should also assess the adoption of virtual reality (VR) formats, and the so-
called “metaverse,” which will incorporate an array of digital payment and online marketing
practices that raise key concerns about fairness and protection.47 Such developments should be
43
See, for example, Jamie Tolentino, “This is What Banking Will Look Like in 10 Years: From AI to
Crypto to Sustainability,” TNW, 14 Dec. 2021, https://thenextweb.com/news/what-banking-will-look-
like-in-10-years.
44
AiAdvertising, “Swarm,” https://www.aiadvertising.com/swarm/.
45
Philip Moyer, “New Research from Google Cloud Reveals Five Innovation Trends for Market Data,”
Google Cloud Blog, 22 Sept. 2021, https://cloud.google.com/blog/topics/financial-services/market-data-
distribution--consumption-through-cloud--ai.
46
See, for example, the PayPal/NBCUniversal deal: Josh Feldman, “Putting the Store in Stories:
NBCUniversal Unveils One Platform Commerce,” 9 Nov. 2020, https://together.nbcuni.com/news/the-
future-of-commerce-at-nbcuniversal/.
47
WhatsApp, “Shopping, Payments, and Customer Service on WhatsApp,” WhatsAp Blog, 22 Oct. 2020,
https://blog.whatsapp.com/shopping-payments-and-customer-service-on-whatsapp/?lang=en; Instagram,
“Introducing: Instagram Shop and Facebook Pay,” Meta fir Business, 16 July 2020,
https://business.instagram.com/blog/announcing-instagram-shop-facebook-pay; Daniel Konstantinovic,
“YouTube Tests Social Commerce Waters, TV Measurement,” eMarketer, 21 Oct. 2021, https://content-
na1.emarketer.com/youtube-tests-social-commerce-waters-tv-measurement; Yasmin Borain, “Marketing
Trends For 2022: Technology, Artificial Intelligence and Internet of Things,” WARC Exclusive, Nov.
2021, https://www.warc.com/content/article/warc-exclusive/marketing-trends-for-2022-technology-
artificial-intelligence-and-internet-of-things/en-gb/141212. WARC explains that “Discovery commerce
confounds traditional understanding of the purchase funnel, where audiences move gradually along the
stages involving awareness, interest, consideration and evaluation, before eventually leading to purchase.
Instead, it’s all about impulse shopping by audiences online who, even if they are not specifically in ‘task
mode’, are in a near constant state of browsing shoppable content.” This means they can quickly go on to
buy new products after discovering them – collapsing the stages of the traditional funnel into just a few
taps and swipes on their phone.” Ed Cox, “What Brands Need to Know About Shopping on TikTok and
the Discovery Commerce Boom,” WARC Best Practice, Oct. 2021,
https://www.warc.com/content/article/bestprac/what-brands-need-to-know-about-shopping-on-tiktok-and-
the-discovery-commerce-boom/139680; “Microsoft’s Own Metaverse is Coming, and it Will Have
PowerPoint,” AdAge, 2 Nov. 2021, https://adage.com/article/digital-marketing-ad-tech-news/microsoft-
entering-metaverse-alongside-facebook/2377541; “The Metaverse – How Brands are Boldly Embracing
10viewed as logical responses to the well-understood-by-industry role of the online media. The
principal purpose for the leading platforms, and the larger commercial digital infrastructure they
are connected to, is to generate revenues from advertising, marketing and other sales. Google,
Facebook, Instagram, Snapchat and Amazon, for example, design their environments to foster
continuous sales and marketing opportunities for their advertisers and retailer clients. They
design, test, deploy and measure each of their applications to ensure they move people through
the marketing “funnel,” such as integrating what are known as “touchpoints” that deepen the
interest a consumer will have with the commercial content. Another key strategy has been to
leverage tracking and an arsenal of powerful analytical tools, enabling financial-services
companies to unleash sophisticated and highly personalized marketing campaigns. As WARC
describes these campaigns,
Discovery commerce confounds traditional understanding of the purchase funnel, where
audiences move gradually along the stages involving awareness, interest, consideration
and evaluation, before eventually leading to purchase. Instead, it’s all about impulse
shopping by audiences online who, even if they are not specifically in ‘task mode’, are in
a near constant state of browsing shoppable content. This means they can quickly go on
to buy new products after discovering them—collapsing the stages of the traditional
funnel into just a few taps and swipes on their phone.48
The commenters have previously examined how the protections offered by the Fair Credit
Reporting Act have been weakened as financial and marketing actors have established a parallel
online pre-screening, marketing and decision-making system that scores and ranks consumers
and operates in real-time but may exist outside of the narrow FCRA definition that applies only
when the information is to be used in establishing a consumer’s eligibility for credit, insurance or
employment. As noted elsewhere in this comment, USPIRG and CDD have long called on
regulators to address the role that the platforms and digital media play in U.S. financial services.
As we explained in a 2012 paper,
A new world has emerged for the marketing of financial products and services. The
promotion and sale of credit cards, mortgages, investments, retirement funds, loans, and
banking are increasingly taking place online. Financial-services companies are taking full
advantage of multichannel opportunities to reach and drive consumer action wherever
they are. From mobile phones, to social media, to online video; financial-services
companies are deploying the latest digital tools to identify and retain customers, generate
a variety of scores on them, sell products, and create new forms of loyalty and
revenues…. Contemporary digital-marketing practices are blurring the boundary
separating marketing credit from offering it to a consumer. Interactive marketing
techniques employ powerful new ways to influence consumer decision-making.
Financial-services and credit-card companies stealthily “shadow” individual consumers
across cyberspace, watching every click they make and engaging in predictive modeling
to help the firm more precisely segment and identify customers to target. The capabilities
Marketing's New Frontier,” The Trade Desk, 28 Oct. 2021, https://www.thetradedesk.com/us/news/the-
metaverse-how-brands-are-boldly-embracing-marketings-new-frontier.
48
Cox, “What Brands Need to Know About Shopping on TikTok and the Discovery Commerce Boom.”
11of online tracking enable the creation of “rich audience profiles,” based on an analysis of
a user’s on-site behavior, which can be combined with an abundance of outside
information. This includes intent data captured online that enables marketers to identify
whom they consider better qualified prospects, sending consumers advertising shaped by
their unique profiles. Armed with a digital dossier of a consumer’s interests, background,
and behaviors and an arsenal of powerful analytical tools, financial-services companies
can unleash sophisticated and highly personalized marketing campaigns.49
Our early warnings are one reason why commentators are pleased that the Bureau has taken up
this issue. As the director noted in his remarks accompanying this inquiry, key outcomes will be
to determine how the firms harvest, use, monetize and share consumer information: “But
payments businesses are network businesses and can gain tremendous scale and market power,
potentially posing new risks and undermining fair competition. Furthermore, knowing what we
spend our money on is a valuable source of data on consumer behavior.”50
Among the key issues that we call on the Bureau to investigate and address are the following:
The Integration of Digital Payment Services with Other Applications by the Leading
Platforms
Pay apps, along with mobile wallets, can incorporate a range of spending and borrowing
features, including savings accounts, “shopping hubs,” discount coupons, and “expanded search
capabilities.” They are playing a much greater role in today’s consumer purchasing environment,
given the downward trend of point-of-sale use of cash. These apps and wallets, however, can be
structured to promote additional consumer-facing “spending opportunities” and tie merchants in
greater dependency of the service, such as Google’s Pay app for India (whose features may be
introduced in the U.S.).51 Peer-to-Peer (P2P) providers, such as PayPal’s Venmo and Square’s
49
Mierzwinski and Chester, “Selling Consumers Not Lists.”
50
Rohit Chopra, “Statement of the Director Regarding the CFPB’s Inquiry into Big Tech Payment
Platforms,” 21 Oct. 2021, https://files.consumerfinance.gov/f/documents/cfpb_section-1022_directors-
statement_2021-10.pdf.
51
Caesar Sengupta, “Powering the Digital Economy; Building a Helpful Google for Everyone in India,”
Google India Blog, 19 Sept. 2019, https://blog.google/intl/en-in/company-news/outreach-
initiatives/powering-digital-economy-
building/?utm_source=Triggermail&utm_medium=email&utm_campaign=Post+Blast+bii-payments-and-
commerce:+Google+Pay+adds+features+to+court+Indian+merchants+%7C+Revolut%27s+SCA+solutio
n+could+prompt+wallet+adoption+%7C+Apple+Card+adds+T-
Mobile+rewards&utm_term=BII+List+PayCom+ALL; Grace Broadbent, “PayPal’s Super App Dreams
Come to Fruition, Setting It Up for Strong Cross-promotion Possibilities,” eMarketer, 22 Sept. 2021,
https://content-na1.emarketer.com/paypal-s-super-app-dreams-come-fruition-setting-up-strong-cross-
promotion-
possibilities?utm_source=Triggermail&utm_medium=email&utm_campaign=PayComm%20Briefing%2
011222021%20-%20APPLE&utm_term=PayCom%20Briefing%20Apple%20Mail%20Clients; Manish
Singh, “Google Pay to Add Hinglish Support in India, Enable Merchants to Create Digital Storefronts,”
TechCrunch, 17 Nov. 2021, https://techcrunch.com/2021/11/17/google-pay-to-add-hinglish-support-in-
india-enable-merchants-to-create-digital-
12Cash App, have incorporated a range of other financial transaction-related features, in order in
part to “tie customers more tightly” to their operations. For example, Venmo offers a credit card
“housed within” its app, and Square has enhanced its “stock trading functionality.”52
Amazon, Apple, Facebook and Google have long been focused on the financial services and
payments sector, reflecting their various hybrid network status as communications network,
direct promoter and seller of goods and services, provider of search data, and key outlet for
digital advertising and marketing.53 The platforms each offer eponymous payment schemes:
Amazon Pay, Apple Pay, Facebook Pay, and Google Pay.54 Google, for example, has partnered
with numerous banks and credit card companies, and counts payments network leader Visa
among the entities involved with its Google Pay financial product. Nevertheless, scuffling is
already occurring in the relationships between the tech payment platforms and the legacy
payment networks, as Amazon, for example, threatens Visa over UK interchange fees.55
These pay services incorporate various loyalty schemes to drive transactions.56 Facebook Pay
enables “secure payments on Facebook, Instagram and Messenger,” and can be used to “make
purchases, send money or donate” on its various platforms. Meta/Facebook has also recently
expanded its loan services to small businesses, advancing funds under invoice using a “fast
track” procedure.57
storefronts/?utm_source=Triggermail&utm_medium=email&utm_campaign=PayComm%20Briefing%20
11222021%20-%20APPLE&utm_term=PayCom%20Briefing%20Apple%20Mail%20Clients.
52
Toplin, “The Payments Ecosystem”; Venmo, “One Credit Card. More Ways to Venmo,”
https://venmo.com/about/creditcard/.
53
See, for example, “Google-BCG Study Reveals Indian Digital Payments Industry to Grow to $500
billion by 2020, Contributing to 15% of GDP,” 25 July 2016, https://www.bcg.com/en-
in/press/25july2016-digital-payments-2020-making-500-billion-ecosystem-in-india; Ryan Browne,
“Facebook-backed Diem Aims to Launch Digital Currency Pilot Later This Year.”
https://www.cnbc.com/2021/04/20/facebook-backed-diem-aims-to-launch-digital-currency-pilot-in-
2021.html; Amazon, “Financial Services,” https://aws.amazon.com/financial-services/.
54
See, for example, Google, “Google Pay,” https://pay.google.com/about/; Facebook, “Facebook Pay,”
https://pay.facebook.com/; Amazon, “Amazon Pay,” https://pay.amazon.com/. Apple also has a wallet
function, as does Google through its Pay service. Apple, “Wallet,” https://www.apple.com/wallet/.
55
Margot Patrick, “Amazon to Stop Accepting U.K.-Issued Visa Credit Cards,” Wall Street Journal, 17
Nov. 2021, https://www.wsj.com/articles/amazon-to-stop-accepting-u-k-issued-visa-credit-cards-
11637153600.
56
Google, “United States and Outlying Territories: Supported Payment Methods,” Google Pay Help,
https://support.google.com/pay/answer/7351835?hl=en; Visa, “Confident Payments with Google Pay™
and Visa Cards,” https://usa.visa.com/pay-with-visa/featured-technologies/google-pay-consumer.html;
Google, “Google Pay for Passes,” https://developers.google.com/pay/passes.
57
Facebook, “Facebook Invoice Fast Track,” Meta for Business,
https://www.facebook.com/business/invoice-fast-track; Facebook, “Streamline Checkout on Your Site
with Facebook Pay,” Meta for Business, 14 July 2021,
https://www.facebook.com/business/news/integrate-facebook-pay-directly-into-business-
website?ref=search_new_0; Facebook, “Can I Use Facebook Pay on Instagram to Make Purchases in
13The Consolidation of Platforms and Payment Services
Digital payment providers, including platforms, have made substantial M&A investments. For
example, in 2019, PayPal acquired Honey for $4 billion, which provided it with a service that
can be added on to internet browsers so consumers can generate discount coupons. PayPal has
integrated Honey to help expand its PayPal market footprint. The role of Honey technology in
PayPal illustrates how the payment services are integrating digital marketing strategies to drive
the use of its payment functions. Honey provides PayPal with the ability to generate “couponing
at scale,” especially useful, it notes, during a time of pandemic-induced economic stress. A
PayPal executive explained last year that “one of the main reasons why…people [are] going
online [but] leave their items in a cart and do not fulfill them is because they don’t think they
have the right deal…. And what Honey does is…it makes sure that you, as a consumer,
have…the confidence that you’re getting the right price.” Honey technology uses machine
learning to identify consumers who can deliver greater “lifetime value” and make other
segmentation targeting decisions, for example.58
Paypal’s Venmo mobile payment app is now integrating Honey, as well as implementing such
“neobank” features as “budgeting, savings and cryptocurrency.” Consumers are said to soon
“gain the ability to buy, hold and sell crypto inside the Venmo mobile app,” along with other
“investment alternatives.” 59 In 2021, PayPal also acquired security infrastructure company Curv to
integrate it into its “business unit focused on blockchain, crypto and digital currencies.”60
Last August, Square announced plans to acquire “Buy Now, Pay Later” provider Afterpay to
“deepen and reinforce the connections between our Cash App and Seller ecosystems….” As the
announcement of the deal noted, the acquisition “will expand Cash App’s growing product
offering…and help customers discover new merchants when the Afterpay App is integrated into
Cash App.” In its presentation to investors, Square described the “rapidly growing opportunity”
driven by BNPL, explaining that merchants are embracing “omnichannel” strategies and using
Online Stores?” Instagram Help Center,
https://www.facebook.com/help/instagram/360841165784331/?helpref=related.
58
Sarah Perez, “PayPal to Acquire Shopping and Rewards Platform Honey for $4B,” TechCrunch, 20
Nov. 2019, https://techcrunch.com/2019/11/20/paypal-to-acquire-shopping-and-rewards-platform-honey-
for-4-billion/; “Honey Expands Shopping Rewards with Introduction of Cash Back Through PayPal,” 5
Oct. 2021, https://newsroom.paypal-corp.com/2021-10-05-Honey-Expands-Shopping-Rewards-with-
Introduction-of-Cash-Back-Through-PayPal; “PayPal’s Honey Begins Offering Cash Back,” Pymnts, 5
Oct. 2021, https://www.pymnts.com/news/loyalty-and-rewards-news/2021/paypal-honey-begins; Louise
Matsakis, “Why Did PayPal Pay $4 Billion for a Coupon Browser Extension?” Wired, 23 Nov. 2019,
https://www.wired.com/story/paypal-honey-4-billion-dollars/; “Honey: Company Profile,” SpringML,
https://www.springml.com/customers/customer-story-honey-science-corporation/.
59
Sarah Perez, “Venmo to Gain Crypto, Budgeting, Savings and Honey Integrations This Year,”
TechCrunch, 4 Feb. 2021, https://techcrunch.com/2021/02/04/venmo-to-gain-crypto-budgeting-bill-pay-
and-honey-integrations-this-year/.
60
“PayPal to Acquire Curv,” 8 Mar. 2021, https://newsroom.paypal-corp.com/2021-03-08-PayPal-to-
Acquire-Curv. For other recent PayPal acquisitions, see “Acquisitions by PayPal,” Tracxn, 29 Oct. 2021,
https://tracxn.com/d/acquisitions/acquisitionsbyPayPal.
14BNPL to increase “basket size” and “customer acquisition,” among other results. It noted the role
that BNPL can play as a “lead generator,” highlighting that the “Afterpay App drove one million
leads per days across its merchant base” this year. Lead generation is driven by in-app
“commerce discovery” applications, explained Square.61
Another form of consolidation is through the industry’s interlinked practice involving APIs. The
role of “application programming interfaces” (APIs) to interconnect platforms and other payment
processing entities with partners and affiliates is facilitating the process that Google calls
“embedded finance.” For example, “APIs can connect a ride-sharing app to a customer’s credit
card or bank account to collect payment and then divide those funds…. [U]sing APIs, finance
can be everywhere.” Through cloud services operated by the largest platforms there is a growing
range of processing activities for financial services. For example, PayPal is using the Google
Cloud to operationalize key components of is payment platform. Google now operates a
“Datashare” service via its cloud that “brings together the entire capital markets ecosystem—data
publishers, and data consumers—to exchange market data securely and easily.” This includes
access to its machine learning based insight generation service BigQuery.62
In summary: what are the consumer harms threatened by the entry into payments of these
Big Tech firms?
Data is at the core of today’s digital economy, including the affordances of digital payments
As the Bureau noted in its discussion of behavioral advertising, a variety of complex data-
profiling and -targeting applications is deeply embedded into today’s digitally driven economy.
Financial services companies, leading brands, and platforms have made significant investments
to deploy a robust internal and external infrastructure for personalized and programmatic digital
marketing. Indeed, a vast warren of techniques, partnerships, and marketing automation
technologies is continually at work to drive consumer behavior and financial transactions. Data
profiling information is available through marketing clouds, data marketing platforms (DMPs),
and other sources to continually identify and analyze customers and perspective clients. Through
practices that create what is known as an “ID Graf,” companies stitch together a person’s
61
“Square, Inc. Announces Plans to Acquire Afterpay, Strengthening and Enabling Further Integration
Between its Seller and Cash App Ecosystems,” 1 Aug. 2021, https://squareup.com/us/en/press/square-
announces-plans-to-acquire-afterpay; “Square & Afterpay: Square Adds Afterpay to Seller and Cash App,
Connecting its Ecosystems,” Aug. 2021,
https://s27.q4cdn.com/311240100/files/doc_financials/2021/q2/Square-Plans-to-Acquire-Afterpay-
Transaction-Overview.pdf; other related recent mergers and buyouts include: Klarna, “Shopping Just Got
Smooother: Klarna Acquires HERO,” 14 July 2021, https://www.klarna.com/us/blog/shopping-just-got-
smooother-klarna-acquires-hero/; “Mastercard Taps Into Buy Now, Pay Later Market with Latest
Offering,” Reuters, 28 Sept. 2021, https://www.reuters.com/business/finance/mastercard-launches-buy-
now-pay-later-program-2021-09-28/.
62
Google, “PayPal Leverages Google Cloud to Flawlessly Manage Surges in Financial Transactions,”
Google Cloud, https://cloud.google.com/customers/paypal. See also Amazon, “Financial Services”;
Christin Brown, “Introducing Datashare Solution for Financial Services for Licensed Market Data
Discovery, Access and Analytics on Google Cloud,” Google Cloud Blog, 27 May 2021,
https://cloud.google.com/blog/topics/financial-services/announcing-the-general-availability-of-datashare.
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